Healthcare Quality and Cost Management Insights

AHPI Institute Of Healthcare Quality (Certified Healthcare Quality Practitioner)

MANAGING QUALITY & COST IN HEALTHCARE (MODULE-19)

HEALTHCARE TODAY C C OLDEN DAYS TODAY INEXPENSIVE EXPENSIVE H H SAFE (PERCIEVED) POTENTIALLY DANGEROUS Q Q LESS INVESIVE TECHNOLOGY DRIVEN P P PERSONALISED CARE FRAGMENTED CARE FAMILY PHYSICIAN CONSULTANT DRIVEN

QUALITY IN HEALTHCARE C C IOM DEFINES QUALITY IN HEALTHCARE AS THE DEGREE TO WHICH HEALTHCARE SERVICES FOR INDIVIDUAL AND POPULATION INCRESE THE LIKELIHOOD OF DESIRED OUTCOME AND ARE CONSISTANT WITH CURRENT PROFESSIONAL KNOWLEDGE H H Q Q P P

DIMENTIONS OF QUALITY IN TODAYS HEALTHCARE The degree of compliance to standards . Effectiveness of care: Efficiency of service delivery: Safety: Access to services: Interpersonal relations: effective listening and communication between providers and clients. Continuity of services: Physical infrastructure and comfort: Choice: When appropriate, client choice of provider, insurance plan, or treatment C C H H Q Q P P

CONCEPT OF COST IN HEALTHCARE TODAY Monetary or financial cost expenses incurred for an input or to provide a product or service, at a given time ( medical supplies, price for a clinical service) Economic or opportunity cost the value of benefits forgone by using resources to provide alternate products or services (e.g., the value of employee's time engaged in work outside of primary job duties, the value of resources spent on an unnecessary lab test). Accounting cost costs applied to reflect the real value of a product or service at a given time; the cost is not actually incurred (e.g., depreciation allowance for medical equipment). Shadow prices costs applied to goods and services whose true value is not the same as listed (e.g., value of donated equipment, the time of volunteer staff). C C H H Q Q P P

COST DIAMENTIONS Cost categories, i.e., To assess the cost of drugs, labor or equipment Activities, such as assessing the cost of meetings, training Processes, the series of activities that are sequenced to produce a service, for example, cleaning a delivery room, preparing the patient and delivering a baby Services, such as deliveries or outpatient antenatal care consultations Programs or interventions, such as community outreach programs or clinical guidelines; programs or interventions may include multiple processes Departments within the same facility, such as radiology, laboratory, emergency, maternity, etc. Organizations, comprising multiple departments or programs under one cost system C C H H Q Q P P

METHODOLOGIES TO EVALUATE COST AND QUALITY A. Methodologies to evaluate and compare the impact of a specific intervention on cost and quality Cost-effectiveness analysis Cost-benefit/return on investment analysis Cost-utility analysis B. Methodologies to evaluate and monitor cost as well as the cost of poor quality General cost accounting and cost management Activity-based cost management Cost of Quality Analysis Analysis of inefficiency (poor quality) C C H H Q Q P P

MINIMISZING COST AND IMPROVING QUALITY One of the underlying themes so far has been that tools and methodologies for cost management are only as good as a manager s ability to use them to identify and capture opportunities for improvement. In this argument, a good manager may still be able to improve quality without sophisticated tools. C C H H Q Q Another underlying theme in cost-quality analysis is the idea of efficiency based on a quality improvement principle of doing the right thing at the lowest possible cost. Essentially, the methodologies reviewed so far have tried to identify costs that would not have been incurred if quality standards had been achieved (doing things right the first time). P P

MINIMISZING COST AND IMPROVING QUALITY The objective is to use this information to guide the application of quality improvement approaches to minimize this cost. Here, we explore how it may be possible to analyze and improve efficiency in ways not mentioned above. The ideas here are not exhaustive and you should encourage participants to discuss methodologies they have used or ideas that can be explored. C C H H Q Q P P

Ever wonder what 99.9% meant? 200,000 incorrect prescriptions every year 500 incorrect operations each week 50 babies dropped at birth every day 22,000 checks deducted from the wrong bank account each hour 32,000 missed heart beats per person each year C C H H Q Q P P

Cost of Poor Quality Maintenance & service C C Rejects Warranty claims Rework H H Additional labor hours Scrap Opportunity cost if sales greater than plant Cost to customer Q Q Expediting capacity Improvement program costs Excess inventory P P Lost customer loyalty Process control Quality audits Vendor control Longer cycle times Inspection/test (Materials, equipment, labor) How far do we look below the surface?

COST OF POOR QUALITY VISIBLE WHAT IS SEEN AS TIP OF ICEBERG REJECTS REWORK SCRAP MAINTAINCE AND SERVICE ADDITIONAL LABOUR COST WARRENTY CLAIMS C C H H Q Q P P

COST OF POOR QUALITY INVISIBLE WHAT IS NON SEEN & HAS TREMENDOUS IMPACT ON COST C C H H OPPERTUNITY COST LOST CUSTOMER LOYALTY EXCESS INVENTORY QUALITY AUDIT COST TO CUTOMER IMPROVEMENT PROGRAMME COST PROCESS CONTROL MODIFICATION LONGERCYCLE TIME INSPECTION COSTS Q Q P P

Theres nothing new about this Hippocrates said in 400 BC (2500 yrs Back) C C H H Q Q P P

MEDICATION ERRORS The Errors which potentially actually harms pateint These are third largest cause of death in USA Hippocrates oath says first do no harm! No. of deaths are far more than cancer and road accidents C C H H Q Q P P

Background - IOM Report The risk of dying as a result of medical error far surpasses the risk of dying in an airline accident. Death on Domestic Flights - 1 in 8,000,000 flights Death in Hospitals from Medical Errors 1 in 343 Admits to 1 in 764 Admits Adverse Events in Hospitals 1 in 27 Admits to 1 in 34 Admits C C H H Q Q P P

How big is the problem? USA (2019-20 REPORT) C C Errors by health care workers effect about 3-4% patient Mean of 7% ADE >7,000 ADE deaths per year 2 million nosocomial infection per year huge spending on antibiotics Average ICU patient experiences almost 2 errors per day 12 million mis-diagnosis per year H H Q Q P P

How big is the problem? Each year , 250000 deaths due to medication errors More than breast cancer and accidents & aids Third common cause of death in USA Annual cost of medication errors US$210/- billion (21000 million$) At least 80% bills contain one error Surgical error at least 4000 per year C C H H Q Q P P

How big is the problem? UK (OLD REPORT) 400 deaths involving medical devices 10,000 ADEs 1,150 psychiatric patients commit suicide 28,000 written complaints 400 million paid out for negligence claims harm in 10% admissions 2 billion annual cost C C H H Q Q P P

HEALTH CARE SPENDING Government 35% Insurance 15% Charitable Organizations 5 -7 % Employer provided5 -8 % Out of pocket spending 35-40% Health care spending of middle and low income countries is growing at 6% as against 4% in developed countries About 100 million people are pushed into extreme poverty every year C C H H Q Q P P

COST OF FRAGMENTED DELIVERY Multiple consultants view patients from their system s point of view This leads to not seeing patient as one Leading to increase tests Lack of clinical co-ordination Increase medical errors Dissatisfaction in patients mind Increase perception of being taken for ride and extracted money C C H H Q Q P P

COMMUNICATION GAPS Mostly every patient need to interact with multiple agencies while getting medical care like JR.MEDICAL DIAGNOSTIC MEDICAL DEPT NURSING HOUSE KEEPING & SECURITY DIETARY AND PHYSIO BILLING AND INSURANCE Effective communication by care giver has effect on patients outcome and satisfaction. C C H H Q Q P P

COST OF COMMUNICATION GAPS Communication gaps costs the organisation Increased litigation Increase medication errors Increase manpower to cover the gap instead of system improvement Dissatisfied customer leading to doubting integrity Dissatisfied customer leading to a feeling of financial cheating Erosion of brand value and doctors reputation C C H H Q Q P P

ACHEIVEING QUALITY & SAFETY Principle components are 1. Based on written and published standards 2. Peer reviews safety 3. Independent accreditation process for monitoring For quality and safety For continuous quality improvement Involves whole staff External recognition of quality Improve public confidence 4 Develop quality systems in organization C C H H Q Q P P

ROLE OF ACCREDITATION FOR SAFETY & MEDICATION ERRORS Accreditation helps in monitoring various factors to reduce medication Human factors Inadequate training and experience of doctors and nurses staff Over work fatigue and depression Time pressure and unfamiliar setting Failure to acknowledge and report medication errors C C H H Q Q P P

ROLE OF ACCREDITATION FOR SAFETY & MEDICATION ERRORS Complex medical systems and technology and infrastructure failure Long stay , poor communication staff ratios , look alike drugs, potentially dangerous drugs Non reliance on automated systems, cost cutting, environment and design factors in ICU and Emergency Inaccurate/non calibrated medical equipment's and lack of skilled operators. C C H H Q Q P P

COST OF ACHEIVING & MAINTAINING QUALITY Cost of proper technology Cost of enough and proper man power Cost of focus on infection control COST of control on clean/sterile environment Cost of automation and system development and AMCS Cost of accreditation and legal charges Cost of training C C H H Q Q P P

ANALYSING COST: PUT TO GATHER CENTRE EXPENCES 12 15 C C 16 18 DOCTORS PAYMENT H H 17 19 STAFF PAYMENT Q Q 24 27 MATERIALS 5 6 STATUTORY AND AMC P P 3 5 CAPITAL 5 6 DISCOUNTS AND MKTING 82% 96% PERCENTAGE OF REVENUE FOR MATURE HOSPITAL

OPERATIONAL COSTS IN HEALTHCARE Operational costs are mainly; Centre expenses Staff salaries with staff welfare including contract labour Doctors salaries with variable component Material cost chargeable and non- chargeable Marketing cost AMC and maintenance cost * Discounts * Small capital investment cost thro opex C C H H Q Q P P

WHAT CAN ADD VALUE Measurement and quantification Logical cost subsidies Outcome analysis, clinical protocols, standardization Sustainable cost reductions Proper maintenance in time for infra and equipment Less expensive resources for the need to compete Eye on medical progress Rational cost analysis Activity based costing Cost centre concept Ethical public image C C H H Q Q P P

IMPROVE VALUE AND SERVICE DELIVARY FOR BETTER COSTS 1. Eliminate variance in treatment provided 2. Eliminate unnecessary process not adding value 3. Eliminate bottlenecks to improve capacity utilization 4. Optimize process and resources at each level 5. Optimize clinical skill matching patients conditions 6. Speedup reduce cycle time 7. Adopt necessary technological advances and learn from other sectors innovation. C C H H Q Q P P

Thank You